With the blockchain industry expected to exceed a $7.6 billion valuation by 2022, it's no wonder companies large and small, old and new are scrambling to land their piece of the pie. As is often the case in today's financial services market, industry players are in a delicate dance of collaboration and competition – and blockchain is no exception.
In this week's Blockchain Tracker, PYMNTS examines some of the newest partnerships – and rivalries – to land in blockchain's center stage.
HashCash, a California-based blockchain company, announced two new collaborations in the financial services market as traditional players grow eager to launch DLT solutions. One of these collaborations, announced Tuesday (Jan. 16), is with Yes Bank, which will leverage HashCash's HC NET blockchain network to deploy a corporate payments solution that can facilitate cross-border transactions.
“Our interest in blockchain was owing to its potential of ushering in an era of efficient processes through transparency, speed, security and seamless connections in order to maintain records and make quicker transactions," said Yes Bank’s CIO, Anup Purohit. "We wanted to create a blockchain banking solution for our clients, which would have immediate, measurable impact and provide a quantum leap compared to the current process.”
But HashCash isn't stopping there with industry collaboration: Also on Tuesday, the company revealed a partnership with Russia's Alfa-Bank to deploy a blockchain-fueled clearing house solution for corporate and retail customers.
With a Memorandum of Understanding (MOU) in hand, SWIFT has also emerged as a top blockchain collaborator with seven central securities depositories, the company announced this week. Together, the partners will explore how to use distributed ledger technology to support post-trade procedures like corporate actions processing, while also digging into how key messaging standards like ISO 20022 can also come into play here.
“To ensure interoperability and smooth migration, it is crucial that new technologies support existing common standards, such as ISO 20022,” said Stephen Lindsay, head of standards at SWIFT. “The promise of the technology on paper is great, but it is currently missing a key component around standardization. There is clear value in re-using established business definitions and facilitating interoperability amongst DLT implementations, which this project will demonstrate.”
Large enterprises are also striking collaborations in the name of blockchain, like IBM, which announced this week a new joint venture with logistics giant Maersk. The two plan to develop a blockchain platform for global shippers to boost transparency and efficiency in supply chain management and logistics. The companies first struck a partnership in 2016 that has involved to other collaborators like Dow Chemical and DuPont, according to Global Trade Review reports. This time, however, IBM and Maersk plan to launch their own company to operate the platform, which will also include other technologies like AI and IoT, reports said.
The biggest rivalry story of the week comes curtesy of law firm Envision IP. According to reports in American Banker, analysts have crowned Bank of America as the top investor in blockchain patents, with the FI having either applied for or already obtained 43 of them.
Bank of America surpasses blockchain heavyweight IBM and fellow financial services giant Mastercard, both of which have 27 blockchain patents. Fidelity Investments, Dell, Toronto-Dominion Bank and Accenture also landed in the top 10.
According to Envision IP managing attorney Maulin Shah, the data suggests that "the technology sector hasn't embraced blockchain as much as the financial services industry."
Another brewing rivalry is one that spans the gamut: blockchain versus bitcoin. Investors are pushing heavily into both, yet some analysts – and governments – believe blockchain will ultimately outlast the bitcoin hype.
Bitcoin plummeted as much as 18 percent on Tuesday (Jan. 16), according to Reuters, following news of regulatory crackdowns from South Korea, only the latest jurisdiction to emphasize skepticism against cryptocurrencies. In response to bitcoin's drop, other cryptocurrencies, including top rival Ethereum, also slid, reports noted. So while analysts expect the blockchain market's valuation to spike toward the end of the decade, cryptocurrencies' future could be far less bright.